System and method of auctioning a defaulted loan

ABSTRACT

A method and system for conducting an online property auction whereby the system allows for identifying an owner of property willing to sell his property by an online auction, entering into a contract with the owner obligating him to complete the sales of his property conducted pursuant to terms of the contract; pre-arranging a minimum auction price for his property that accounts for the owner&#39;s interest, plus costs and fees, conducting the on-line auction with a plurality of bidders for his property whereby at the on-line auction&#39;s conclusion there is a winning bidder and ensuring the transfer of the winning bidder&#39;s funds to the escrow holder.

CROSS REFERENCE TO RELATED APPLICATIONS

This is a divisional application of U.S. patent application Ser. No.12/463,784 filed on May 11, 2009 which claims priority tocontinuation-in-part of a U.S. patent application Ser. No: 12/217,286filed on Jul. 2, 2008, entitled “Method of Doing Business for Auctioninga Defaulted Loan” which claims priority to U.S. Provisional PatentApplication filed Jul. 10, 2007 under Ser. No. 60/958,887.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to a system and method of doing businessfor auctioning a defaulted loan. More specifically, the presentinvention relates to a system and method for assisting an owner of apromissory note in default and more particularly to a system and amethod for assisting said note owner, including the steps of sellingsaid defaulted note by means of an auction using an internet web portalas an auction site.

2. Description of the Prior Art

U.S. Pat. No. 7,213,001 teaches a method for restructuring a debt of adebtor who has an interest in a distressed property by a third party.The method includes the steps of comparing a present appraised value ofthe property to a total cost for purchasing the property from the debtorby the third party, satisfying the personal debt of debtor by the thirdparty, and reselling the property back from the third party to thedebtor based upon a present appraised value of the property. If thepresent appraised value of the property exceeds the total cost to thethird party by a preselected value then the third party purchases theproperty from the debtor, satisfies the personal debt of the debtor, andresells the property back to the debtor at the present value of theproperty. The vast majority of homes purchased are purchased on thebasis of loan instrument which includes a promissory note that specifiesa principal amount borrowed from a lender and an interest rate, and issecured by a mortgage or deed of trust on the property. The promissorynote establishes the borrower's obligation to make periodic payments tothe lender and the mortgage or deed of trust establishes the lender'sright to foreclose on the property in the event the borrower fails tomake the scheduled payments.

When a person or entity borrows money from a lender, the borrower mustsign a promissory note promising to repay the home loan and a mortgagenote (or deed of trust) to serve as collateral for the loan. The bearerof such notes has a legal claim to the underlying property until thebearer is paid in full. To insure a continuous supply of availablefunds, the lender will often sell groups of notes (mortgage loans) toinvestors. This selling of mortgage loans to investors is referred to asthe secondary mortgage market.

Under most circumstances, the borrower completes the loan obligation bymaking a lump sum payment before the end of the period to satisfy theloan. However, not all borrowers can consistently make loan payments.Often times an acute event or unforeseen financial circumstance maycause the borrower to stop making payments and default on the loan.

As a result of the borrower's default the lender may foreclose on theproperty. Foreclosure is a legal process by which the lender willultimately obtain title in property and resell the property. From theborrower's perspective, foreclosure is traumatic both from a financialas well as emotional standpoint. From a financial standpoint, theborrower not only looses the equity which has been established in theproperty, but even after the property has been foreclosed continues tosuffer in the sense that the borrower's credit has been irrevocablydamaged. From the lender's perspective, foreclosure is also undesirable.The foreclosure process is costly and thus further increases thelender's interest in an already distressed property. In addition, unlessthe ultimate sale price of the home after foreclosure is at least equalto the original value of the home, the lender's return may becompromised.

Prior to foreclosure or subsequent thereto the borrower may file forbankruptcy. Ultimately, however, the result is the same in that the bankwill foreclose on the property once the payment schedule has not beenmet. Accordingly, foreclosure and its resultant hardships discussedabove are not avoided by the borrower filing for bankruptcy. Moreover,by filing for bankruptcy, the borrower's credit will likely be damagedto the point where obtaining any future loan will be extremelydifficult, thereby preventing the homeowner from purchasing a futurehome.

From the lender's perspective, bankruptcy is also not a desirablealternative since bankruptcy is a complicated legal proceeding,associated legal fees and costs, and most importantly, a delay in thecollection of the loan.

In view of the above, it is desirable to seek techniques that wouldensure payment of the loan to the creditor without the need to rely uponeither foreclosure and/or bankruptcy proceedings.

U.S. Pat. No. 5,966,699 teaches a computer system that conducts anelectronic loan auction over a computer network such as the Internet.The computer system includes a computer connected to the Internet, whichperforms the following functions of receiving an electronic loanapplication form from a prospective borrower, providing such applicationto a loan authorizer's computer over the computer network for approval,receiving an electronic message from the loan authorizer's computerindicating whether or not such loan has been approved, entering the loanapplication into a database that is accessible to lenders via thecomputer network if the loan is approved and maintaining the loanapplication in the database for a predetermined period of time duringwhich lenders may submit bid S and the borrower may accept a bid.

U.S. Pat. No 7,127,406 teaches an apparatus and method implementsmanages and tracks on-line digital transactions via an escrow, includingopening, servicing, real-time or near-real time status of the broker, atitle company, lender, vendor, buyer and seller; and closing of anescrow via a medium such as the internet. Multiple access methods areemployed. The present invention provides computerization and internettype process implementation for escrow processes including, but notlimited to, digital transaction coordination, digital statuscoordinators, seamless escrow transactions, on-line digital signatures,video signature authentication, digital certificate authentication,signature authentication, satellite and other wireless transmission ofescrow transactions, voice digital instruction, the merging of voicewith digital data transactions, set-top/web-TV digital escrowtransmission, global digital escrow networking, and the like. The systemincludes appropriate data, application, and servers along withsupporting LAN or WAN-based application to perform escrow services. Themethod of doing business in realty uses on-line communications andincludes the steps of providing an on-line escrow account for parties toa transaction; providing on-line transactional account managementservices with respect to the on-line escrow account for the parties; andproviding secure access to the on-line escrow account limited to theparties and third parties using on-line identification authentication.The system includes the use of computerized devices and communicationdevices connected to the Internet which performs receiving instructionsfor the opening of an escrow; providing and sending digital instructionsto all parties involved in the transaction; offering the availability ofa continuous digital escrow transaction by coordinating and permittingaccess to the on-going status of an escrow in progress; on-line digitalsignature, voice, video fingerprint or retina scanning personalidentification authentication; transfer of funds or other consideration;submission of loan documents; closing escrow, delivering clear title,and release of transaction funds; and the like as would be useful in anescrow transaction.

U.S. Pat. No. 7,069,234 teaches a method of initiating an agreement inan e-Commerce environment. Across the many ‘exchange of value’ sites,there are three prevalent selling models: seller-centric, buyer-centric,and auction. The seller-centric model is the most common. In itssimplest form, a company typically provides information about theirproducts and gives the customer the ability to place orders. Moreadvanced implementations use electronic means for supporting the entiresales and support process including: marketing, product display,merchandising, customer needs assessment, order processing, and manyother activities. In most seller-centric solutions, the infrastructureis created and maintained by the merchant. The customer needs nothingmore than a browser and/or access to the site. In a buyer-centricsolution, the main focus is on customer or buyer trying to fulfill aneed for a product. In contrast to seller-centric sites which offerproducts, a buyer-centric site displays items the buyer would like topurchase—in effect trying to lure sellers. Many of the same capabilitiesas seller-centric sites are needed such as order management and paymentcapabilities. In this case, the customer joins or creates aninfrastructure focused on fulfilling his needs. The infrastructuretypically provides an environment between the trading partners whichpromotes browsing and comparing products, ordering products,fulfillment, payment, and any needed customer support services. Aconcentration should be placed on the ease of transactions andinformation flow. For this reason, sellers may customize their productline to the buyers' specific needs. In a buyer-centric case the buyerprovides the bulk of the e-Commerce infrastructure. Additionalintegration and setup may or may not be required for each tradingpartner who wishes to participate. Implementations requiring sellers tospecially configure or integrate their own systems in order toparticipate are usually only successful where the buyer has substantialmarket power in the relationship, as in GM or Ford in buying parts fromtheir suppliers. In such cases, agreements must be made as to whatinformation is to be shared, how to model the information, the standardsfor messaging and communication, and what technologies will be used.Besides the mechanical hurdle of integrating multiple systems and thesomewhat immature state of the software products to date, convincingtrading partners to adopt an Internet commerce approach can also be verydifficult. If one is not a particularly big or powerful buyer, it can bedifficult to attract potential sellers to come to one's site and spendthe time necessary to learn about one's needs.

This requires sellers to engage in a very different activity than theyhave traditionally performed and many are not eager to change their wayof doing business for a relatively small customer. This section of themarket has been slower to emerge. As mentioned above, trading partnermaintenance is a key issue. Companies at the end of the hub must buyinto the hub's practices and vision. Future vision and direction arealso important. As changes are implemented, all trading partners have tomove together.

Getting buy-in from all partners has the potential to slow down theadoption of new technologies and process innovations which over time canlead to a lack luster of the lowest common denominator approach. Brokeror auction type solutions are also emerging, albeit more slowly. Brokerimplementations do not typically sell their own goods, but ratherprovide an e-Commerce environment to facilitate bringing multiple buyersand sellers together. Both buyers and sellers can utilize the broker'ssite and infrastructure rather than developing and maintaining their owne-Commerce capabilities. In this case, a broker has set up theinfrastructure needed to buy and sell goods. The infrastructure will bevery similar to a seller-centric solution with the addition ofcomponents needed to register goods to be sold (or in a buyer-centrictwist--register request for quote), price negotiation and bidding andreconciliation services. A Trading Network (TN) is an excellent businessexample of a broker site. Users of the TN can issue Request for Quote's(RFQ'S) on the trading network. The request could be for raw materials,components, or finished items. Suppliers are free to answer a requestfor a quote providing they meet some basic guidelines and requirements.The network provides a true win-win relationship. Since the network canbe global, suppliers and purchaser may never have known about are freeto participate. Another example on the consumer side is a sales website.Such a site offers a variety of computer, electronic and fitness goodsas well as a general merchandise auction. Customers can browse items inorder to view product information and their current bid prices.Interested buyers can place a bid online and see how their bid pricecompares with others. The auctions are time-based and follow a detailedbidding process. As customers are out bid, they are notified via e-mailand have the option to reply with a counter bid.

SUMMARY OF INVENTION

The present invention discloses a system and a method for conducting anonline business transaction. More specifically, the present inventionteaches a system and a method for conducting an online businesstransaction between a plurality of remote parties. The system and methodincludes identifying an owner of property that may be willing to sellhis property by an online auction, whether because of default on a loan,or for other reasons. Thereby, when the system identifies an individualseller, the system may allow the individual that is remotely connectedto a network by a computer system, to enter into a contract which may becentrally housed in a database either on the network or on a hostcomputer. The contract with the owner will obligate that individual tocomplete the sale of his/her property pursuant to the terms of thecontract. Additionally, the system may pre-arrange a minimum auctionprice for his property that accounts for the owner's interest, pluscosts and fees. This information may also be inputted by either the lienholder, or the individual property seller. The information relating tothe minimum pricing and other costs associated with the sale of theproperty may also be housed on a database on the network or hostcomputer. The system may then allow for the conducting of an on-lineauction with a plurality of bidders for the property whereby at theon-line auction's conclusion there is a winning bidder. A remote userconnected to the network may then transfer funds from their remotelocation to an online escrow holder which may hold the funds until thecontractual obligations have been met.

To this end, in an exemplary embodiment of the present invention, thesystem allows for identification of a plurality of owners of a pluralityof properties each of which are willing to sell at least one of theirrespective properties by an online auction and entering into contractswith the owners obligating them to complete the sales of their propertyconducted pursuant to the terms of the contract.

In an exemplary embodiment, a system for auctioning a property, thesystem comprising: identifying property owners remotely connected to acomputer network by utilizing a computer station whereby the propertyowners are willing to sell their property by an online auction;providing a database to compile information on properties and propertyowners; the database having at least contractual information whereby aproperty owner enters into contracts, the terms of which obligates themto complete sale of their respective properties; the database containinginformation relating to at least a pre-arranged minimum auction pricefor each property that accounts for the property owner's interest,attendant costs and fees; conducting the on-line auction hosted by aremote server with a plurality of bidders for each property, whereby atthe conclusion of the auction there is a winning bidder; and ensuringtransfer of funds from the winning bidder to the property owner.

In an exemplary embodiment, wherein said property is a securedpromissory note and the secured promissory note is delivered to thewinning bidder through a licensed escrow holder located on the network.

In an exemplary embodiment, wherein the database contains informationrelevant to the auction including the secured promissory notes andsupporting documents.

In an exemplary embodiment, wherein the database requires authenticationof information from potential bidders, including proof of sufficientresources to successfully consummate the auction.

In an exemplary embodiment, a method of auctioning a property, themethod comprising the steps of: identifying property owners remotelyconnected to a computer network by utilizing a computer station wherebythe property owners are willing to sell their property by an onlineauction; providing a database to compile information on properties andproperty owners; the database having at least contractual information,whereby a property owner enters into contracts and the terms of whichobligates them to complete sale of their respective properties; thedatabase further has relevant information relating to the property,including property information pricing and secured promissory note andrelated documents; limiting bidding to bidders who have provensufficient resources to complete the transaction; conducting an auctionfor the secured promissory note whereby at the auction's conclusionthere is a winning bidder; arranging for the delivery of the originalsecured promissory note, its security instrument (trust deed ormortgage), the documentation supporting the value of security of thesecured promissory note (appraisal), and evidence of ownership (titleinsurance) to a licensed escrow holder, who at the conclusion of saidauction will deliver evidence of ownership of the original securedpromissory note and related documents to the winning bidder and theappropriate proceeds to said note owner; and ensuring the transfer ofthe winning bidder's purchase funds to the escrow holder.

In an exemplary embodiment, a method of doing business comprising thesteps of: identifying property owners remotely connected to a computernetwork by utilizing a computer station whereby the property owners arewilling to sell their property by an online auction; providing adatabase to compile information on properties and property owners; thedatabase having at least contractual information whereby a propertyowner enters into contracts and which the terms obligates them tocomplete sale of their respective properties; said database havingpre-determined information relating to a minimum auction price for theirrespective properties that accounts for interest of the respectiveowner's, transaction costs and fees; conducting a plurality of on-lineauctions for a plurality of properties with a plurality of bidders forthe owners' properties.

In an exemplary embodiment, a method of doing business wherein saidproperty is a secured promissory note and wherein said method includesthe step of arranging for the delivery of evidence of ownership of eachsecured promissory note to the respective winning bidder.

In an exemplary embodiment, a method also includes the step of placingon the auction portal relevant information about the secured promissorynote and related documents.

In an exemplary embodiment, a method further includes the step oflimiting bidding to bidders who have proven resources to complete thetransaction.

In an exemplary embodiment, a method of doing business wherein the stepsinclude holding and completing the auction for a defaulted securedpromissory note immediately preceding the foreclosure, trustee, marshal,judicial or any other court ordered sale of the note's underlyingsecurity.

In yet another exemplary embodiment of the present invention, the systemprovides a database whereby the database may contain information andquestionnaires to the owners and/or lien holders which may provide atleast a pre-arranging minimum auction price for the property thataccounts for the owner's interest, plus costs and fees.

Still another exemplary embodiment of the invention is to allow thesystem to host and conduct an online auction for the properties thathave been identified and to solicit bids from a plurality of bidders forthe auctioned property.

Yet another exemplary embodiment is to provide a system and method forauctioning a defaulted loan whereby the system allows the auctionedproperty to be secured by a promissory note and may provide a mechanismfor arranging for the delivery of the secured promissory note to theappropriate promissory note holder.

In another exemplary embodiment, a system and method for auctioning adefaulted loan is provided wherein the system includes information whichmay be uploaded to the hosted database that supports the auction,relevant information about the secured promissory note and relateddocuments.

Still another exemplary embodiment is to provide a system and method forauctioning a defaulted loan whereby the system may prohibit and/or limitbidding on the property to bidders and/or buyers which have provenresources to complete the transaction. This may be accomplished byrequiring an individual bidder to authenticate and log into the systemand upload information relating to financing into the database such thatthe system can authenticate an individual bidder's ability to completethe transaction.

Other aspects and many of the attendant advantages will be more readilyappreciated as the same becomes better understood by reference to thefollowing detailed description and considered in connection with theaccompanying drawings in which like reference symbols designate likeparts throughout the figures.

The features of the present invention which are believed to be novel,are set forth with particularity in the appended claims.

DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of the three elements, Lender, Bidder andTransaction, respectively of an On-line Loan Auction Flowchart accordingto the first embodiment of the present invention.

FIG. 2 is a block diagram of the Lender element of the On-line LoanAuction Flowchart of FIG. 1.

FIG. 3 is a block diagram of the Bidder element of On-line Loan AuctionFlowchart of FIG. 1.

FIG. 4 is a block diagram of the Transaction element of the On-line LoanAuction Flowchart of FIG. 1.

FIG. 5 is an On-line Loan Auction Flowchart of FIG. 1.

DETAILED DESCRIPTION OF THE INVENTION

Referring to FIG. 1 the first embodiment of an On-line Loan AuctionFlowchart 10 is shown as a block diagram. The block diagram consists ofa Lender element 11, a Bidder element 12 and Transaction element 13.Referring to FIG. 2 in conjunction with FIG. 1 the Lender element 11includes a first step 21 is to seek Lenders who are willing to auctionloans on web portal, whereby the lender element 11 includes at least aremote computing station connected to a network. The second step 22 isto enter into a contract with lenders to auction loans and a third step23 is to enable lenders to enter loan data into an on-line auctionsystem having a database provided for this purpose. In the first steps21 property owners who are willing to sell their property by an onlineauction are identified. In the second step 22 property owners enter intocontracts. The terms of the contract obligates them to complete sale oftheir respective properties. The Lender element 11 may also includes thesteps of pre-arranging a minimum auction price for each property thataccounts for the property owner's interest, attendant costs and fees andconducting an on-line auction with a plurality of bidders for eachproperty.

Referring to FIG. 3 in conjunction with FIG. 1 the Bidder element 12includes a first step 31 of seeking bidders to register to bid on loans,a second step 32 of having potential bidders register to bid on loans, athird step 33 to market defaulted loans and a fourth step 34 to allowregistered bidder to bid on loans.

Referring to FIG. 4 in conjunction with FIG. 1 the Transaction element13 includes a first step 41 of reviewing bids submitted by approvedbidders, a second step 42 of selecting winning bid, a third step 43 ofinforming winning bidder and a fourth step 44 of having winning bidderwire transfer funds to cover his winning bid. The Transaction element 13also includes a fifth step 45 of opening escrow, a sixth step 46 ofdistributing auction proceeds to lender and a seventh step 47 oftransferring loans title to winning bidder. At the conclusion of theauction there is a winning bidder. The method further includes the stepof ensuring transfer of funds from the winning bidder to the propertyowner.

Referring to FIG. 5 in conjunction with FIG. 1, FIG. 2, FIG. 3 and FIG.4 the On-line Loan Auction Flowchart 10 is shown in context andintegrates the Lender element 11, Bidder Element and the Transactionelement 13.

In a second embodiment a method of doing business includes steps ofidentifying property owners willing to sell their property by an onlineauction and entering the property owners into contracts. The system mayallow an individual property owner connected to a computing system whichin turn is connected to a network to input information into the system.This information input by the individual property owner is then storedin a database housed in a central hosting system. The central hostingsystem may be a website that an individual user may access, authenticatethemselves and enter into the site. Information input by the individualproperty owners will be stored on a database located on a remote hostcomputer. Additionally, the database located on the remote host computermay include information relating to the terms of the contract which mayobligate the owners to compete the sale of their respective properties.Moreover, the host computer may also have proprietary software whichrequires information to be input prior to the auction which may includevarious information, such as descriptions, pictures relating to theproperty and a pre-arranged minimum auction price for each property tobe sold. Additional information such as attendant costs and fees may becalculated by the processor and proprietary software prior to conductingthe on-line auction with a plurality of bidders for each property. Atthe conclusion of the auction there is a winning bidder. The methodfurther includes the step of ensuring transfer of funds from the winningbidder to the property owner.

The property is a secured promissory note. The method still furtherincludes the steps of arranging for delivery of the secured promissorynote to the winning bidder through a licensed escrow holder, placing onan online web site or portal, relevant information about said auctionand the secured promissory notes and supporting documents and limitingbidding to only those bidders with proven sufficient resources tosuccessfully consummate the auction.

In a third embodiment a method doing business includes the steps ofidentifying owners of secured promissory notes willing to sell theirsecured promissory notes by an online auction and entering the ownersinto a contract the terms of which obligates them to complete the salesof their respective secured promissory notes. The method also includesthe steps of pre-arranging a minimum auction price for the securedpromissory note that accounts for the secured promissory note owner'sinterest and contracted costs and fees, placing on the auction portalrelevant information about the secured promissory note and relateddocuments and limiting bidding to bidders who have proven sufficientresources to complete the transaction. The method further includes thesteps of conducting an auction for the secured promissory note wherebyat the auction's conclusion there is a winning bidder, arranging for thedelivery of the original secured promissory note, its securityinstrument (trust deed or mortgage), the documentation supporting thevalue of security of the secured promissory note (appraisal), andevidence of ownership (title insurance) to a licensed escrow holder, whoat the conclusion of the auction, will deliver evidence of ownership ofthe original secured promissory note and related documents to thewinning bidder and the appropriate proceeds to said note owner andensuring the transfer of the winning bidder's purchase funds to theescrow holder.

In a fourth embodiment a method of doing business includes the steps ofidentifying a plurality of owners plurality of properties, each of whichwould be willing to sell at least one of their respective properties viaonline auction, entering into contracts with the plurality of ownersobligating them to complete the sales of their respective property'sconducted pursuant to the contracts' terms and pre-arranging a minimumauction price for their respective properties that accounts for interestof the respective owner's, transaction costs and fees. The method alsoincludes the steps of conducting a plurality of on-line auctions for aplurality of properties with a plurality of bidders for the owners'properties. The property is a secured promissory note. The method mayfurther include the step of arranging for the delivery of evidence ofownership of each secured promissory note to the respective winningbidder. This method may still also includes the steps of placing on theauction portal relevant information about the secured promissory noteand related documents, limiting bidding to bidders who have provenresources to complete the transaction and the step of holding andcompleting the auction for a defaulted secured promissory noteimmediately preceding the foreclosure, trustee, marshal, judicial or anyother court ordered sale of the note's underlying security.

In the fifth embodiment a method of doing business includes identifyingan owner of the property willing to sell his property by an onlineauction, entering into a contract with the owner obligating him tocomplete the sales of his property conducted pursuant to terms of thecontract; pre-arranging a minimum auction price for his property thataccounts for the owner's interest, plus costs and fees, conducting theon-line auction with a plurality of bidders for his property whereby atthe on-line auction's conclusion, there is a winning bidder and ensuringthe transfer of the winning bidder's funds to the escrow holder. A firststep is to identify a plurality of owners of a plurality of propertieseach of which are willing to sell at least one of their respectiveproperties by an online auction and to enter into contracts with theowners obligating them to complete the sales of their property conductedpursuant to terms of the contract. A second step is to pre-arrange aminimum auction price for his property that accounts for interest of theowner, plus costs and fees and to conduct an on-line auction for theproperty of one of the owners with a plurality of bidders for hisproperty. The third step is to arrange for the delivery of the securedpromissory note. The fourth step is to place on the auction's portal,relevant information about the secured promissory note and relateddocuments and to limit bidding to bidders who have proven resources tocomplete the transaction.

In summary the method includes a first step of the method is identifyinga plurality of owners of a plurality of properties each of which arewilling to sell at least one of their respective properties by an onlineauction and entering into a contract with the owners obligating them tocomplete the sales of their respective properties conducted pursuant tothe terms of the contracts and a second step is pre-arranging a minimumauction price for his property that accounts for interest of the owner,plus costs and fees and conducting an on-line auction for the propertyof one of the owners with a plurality of bidders for his property. Themethod also includes a third step of the method is arranging for thedelivery of the secured promissory note and a fourth steps of the methodincludes placing an the auction's Portal relevant information about thesecured promissory note and related documents and limiting bidding tobidders who have proven resources to complete the transaction.

From the foregoing, it can be seen that a method of doing business hasbeen described. It should be noted that the sketches are not drawn toscale and that distances of and between the figures are not to beconsidered significant.

Accordingly, it is intended that the foregoing disclosure and showingmade in the drawings shall be considered only as an illustrationprinciple of the present invention.

What is claimed is:
 1. A system for auctioning a property, the systemcomprising: a computer station connected to a communications network,the computer station comprising at least a processor and a non-transientmachine readable medium which stores instructions which when executed bythe computer causes the computer to identify property owners remotelyconnected to the communications network that are willing to sell theirproperties by way of an online auction; a database in communication withthe computer station, the database comprising at least a non-transientmachine readable medium and a processor configured to compileinformation on the properties and the property owners, including eachproperty's price and secured promissory note; the database being furtherconfigured to provide contractual information to the property owners andbidders, whereby the property owners and bidders may enter intocontracts, and the terms by which the property owners are obligated tocomplete sales of their respective properties; the contractualinformation comprising at least a pre-arranged minimum auction price foreach property that accounts for the property owner's interest, andattendant costs and fees; the computer station and the database beingconfigured to provide an authentication process so as to limit theonline auction to bidders which have sufficient resources to completethe transaction; and a remote server in communication with the databaseand the computer station, the remote server being configured to host theonline auction to a plurality of bidders for each property's securedpromissory note, whereby at the auction's conclusion there is a winningbidder having sufficient resources to complete the transaction; wherethe system is configured to arrange for a delivery of the property'ssecured promissory note, its security instrument (trust deed ormortgage), documentation supporting the value of the security of thesecured promissory note (appraisal), and evidence of ownership to alicensed escrow holder associated with the transaction, where at theconclusion of the online auction the licensed escrow holder delivers theevidence of ownership of the property's secured promissory note, thesecurity instrument (trust deed or mortgage), and the documentationsupporting the value of the security of the secured promissory note(appraisal) to the winning bidder, and where the licensed escrow holdertransfers funds in an amount of at least a winning bid from the winningbidder to the property owner; and where the system is configured toensure transfer of funds from the winning bidder to the property owner.2. The system according to claim 1 wherein said property is a securedpromissory note which is delivered to the winning bidder through alicensed escrow holder connected to the communications network.
 3. Thesystem according to claim 1 wherein the database is configured tocompile information relevant to the auction of each property, includingat least the secured promissory note, its security instrument (trustdeed or mortgage), documentation supporting the value of the security ofthe secured promissory note (appraisal), and evidence of ownership. 4.The system according to claim 1 wherein the computer station and thedatabase are configured to require authentication of informationreceived from potential bidders, including proof of sufficient resourcesto successfully consummate the auction.